Essence of Claim Determines Application of Breach of Contract Exclusion

Many errors and omissions (E&O) and similar malpractice insurance policies include a breach of contract exclusion. Insureds who purchase these policies often work from contracts, which can leave the door open for their insurance company to refuse to defend lawsuits based on work related to those contracts. Courts’ decisions on whether the insurers must provide coverage vary based on the essence of the claim against the policyholder. Read how three claims against three different insurance companies resulted in different rulings, and what policyholders can do to receive the best outcome if their insurance company denies coverage.